Investment Climate in the Northern Port City of Hai Phong

Posted by Written by Koushan Das Reading Time: 5 minutes

Hai Phong, the northern port city, is among the favorite destinations for foreign and domestic investors. Situated about 100 km from the capital, Hanoi, Hai Phong is one of the five centrally governed cities of Vietnam. With its huge infrastructure investments, port access, and proximity to export markets, the city is one of the major manufacturing and logistics hub in Vietnam.

Economic growth

In 2017, the city’s economy grew 14.01 percent, highest since 1994 and twice that of the national average. In the first six months of 2018, the gross regional domestic product (GRDP) reached 16.3 percent, third highest in the country.

Sector growth

Industry and construction sector grew the fastest at 25.02 percent in the first half of 2018. Compared to the first six months of 2017, industry sector grew by 25.57 percent, while the construction sector grew by 21.09 percent. Manufacturing sector witnessed the highest growth at 27.68 percent.

The services sector grew by 10.37 percent, with transportation and warehousing recording the highest growth at 14.14 percent. Wholesale and retail sales grew by 11.08 percent, while accommodation and food services increased by 15.88 percent.

In H1-2018, agriculture, forestry, and fisheries grew by 2.77 percent, with fisheries leading at 7.88 percent, followed by agriculture and forestry at 0.97 percent and 0.66 percent respectively.

Products that witnessed a production growth in the first half of 2018 were communication equipment, construction materials, consumer electronics, apparel, and footwear.

Economic structure

The services sector continues to account for the highest share in the city’s GDP at 45.09 percent, followed closely by industry and construction at 43.92 percent. Agriculture, forestry, and fisheries only accounted for 5.78 percent of the economy.



In the first six months of 2018, exports turnover reached US$3.9 billion, up 25.34 percent over the same period in 2017. The domestic sector accounted for US$964.3 million, which grew by 19.36 percent, while the FDI sector grew by 27.43 percent to US$2.95 billion.

Plastics, textiles and garments, footwear, electronics products, and electric wires and cables witnessed the highest growth in exports. 


Import turnover in H1 of 2018 was US$3.74 billion, up 19.6 percent compared to 2017. Domestic sector’s imports reached US$955.7 million, up 15.19 percent, while imports for the FDI sector stood at US$2.78 billion, growing by 20.59 percent.

Items that saw higher demand compared to the same period in 2017 were chemicals, garment and footwear accessories, and machinery.


As of June 2018, total registered capital stood at US$15.64 billion for 546 projects. In H1 of 2018, FDI reached US$1.26 billion, growing by more than 153 percent compared to the same period in 2017. Current FDI is already equal to 104.7 percent of the government’s 2018 target.

The region has drawn significant investments from foreign and domestic investors alike. Domestic firms such as Vingroup, Sungroup, Truong Xuan, Him Lam, and FLC have invested billions in urban development, tourism, agriculture, healthcare, and education.

Foreign firms such as LG, AEON, Kyocera, Hyundai, Bridgestone, Nippon, Chevron, and GE have also established a manufacturing presence in the region and invested billions in the last few years.

Majority of the foreign capital are invested in industries such as logistics, manufacturing, textiles, consumer electronics, chemicals, automobile parts, and petrochemicals.


Infrastructure development in ports, highways, airports, and utilities along with a favorable location are the key factors that continue to attract investors to the region.


The Tan Vu-Lach Huyen Highway and Bridge are one of the biggest infrastructure projects in Hai Phong. It is a 15.43 km highway, which also includes a 5.44 km sea-crossing bridge, one of the longest in Southeast Asia. The highway will link the Hanoi-Haiphong Expressway to the new Lach Huyen Port, a deep-water port in Cat Hai Island. The US$523 million project is a major component of the Lach Huyen Port’s surrounding infrastructure.

Another major bridge under development is the Bach Dang Bridge, which will connect Hai Phong to Ha Long, in the northern coastal province of Quang Ninh. Along with the Hai Phong-Ha Long-Van Don highway, connectivity between the three major economic centers in the north, Hanoi, Hai Phong and Quang Ninh will be further improved. The distance between Ha Long and Hai Phong have reduced from 75 km to 25 km, and between Hanoi and Hai Long has reduced from 180km to 130 km due to the bridge.

Other major highways and bridges in the region include the National Highway 10, Hoang Van Thu Bridge, and Hanoi-Hai Phong and Ha Long-Hai Phong expressways.


Hai Phong has a large number of ports, which acts as a gateway for the goods originating from the surrounding industrial zones. Hai Phong Port, located on River Cam is a major port in the region. However, as it is not a deep-water port, transshipments are required for transporting goods. In addition, the Dinh Vu and Nam Dinh Vu port, also support the shipping needs of the region. These ports are currently being upgraded to increase capacity.

A new port, the Lach Huyen international Port, also called the Hai Phong International Gateway Port, which opened in May 2018, will be capable of handling 300,000 20-foot equivalent units or TEUs. The port capacity is being increased and once completed, it will be able to handle between 2 million to 3 million TEUs by 2019. The Lach Huyen Port will reduce shipping time to Europe from 30 to 23 days, US East Coast from 35 to 27-30 days, and US West Coast from 20 to 13-15 days as they would not require transshipments. An additional nine terminals will be built between 2020 and 2025 and 23 terminals by 2030 in the port. The annual volume of shipped goods is forecast to increase to 35 million by 2020 and 118 million by 2030.


Hai Phong has two international airports in the region, Cat Bi International Airport in Hai Phong and Noi Bai International Airport in Hanoi. From 2013 to 2017, the average number of passengers rose by 26.8 percent and the cargo output increased by 20 percent in the Cat Bai airport. A second terminal is being planned in the Cat Bi International Airport, which will be able to support 4.5 – 5 million passengers a year by 2020 and 8 – 8.5 million passengers by 2025. The Noi Bai International Airport in Hanoi is one of the two major airports in Vietnam in terms of capacity and traffic, along with Tan Son Nhat International Airport in Ho Chi Minh City.

Industrial Zones

As of December 2017, industrial and economic zones in Hai Phong have attracted 250 FDI projects, with a total investment capital of US$11.36 billion and 118 domestic projects worth VND 94,757 billion (US$4.1 billion).

The Dinh Vu – Cat Hai Economic Zone, established in 2008 and one of the five key coastal economic zones of Vietnam, has transformed into a major industrial and logistics hub in the last decade due to its port systems, industrial zones, and investment incentives such as 10 percent (for 15 years) corporate income tax, 50 percent reduction in personal income tax, and import/export tax exemptions.

Some of the major industrial zones in the region include the Deep C HP I, VSIP Hai Phong Industrial Zone, Nomura – Haiphong Industrial Zone, and Trang Due Industrial Zone.

Deep C Hai Phong I

The Deep C Hai Phong I, previously known as the Dinh VU Industrial Zone and established in 1997, currently has over 70 projects worth US$3 billion. The 3,000 ha industrial zone is situated adjacent to the Lach Huyen port, Cat Bi International Airport, and North Vietnam Coastal Expressway. Major industries in the zone include chemicals, petrochemicals, shipbuilding, heavy, and light industry.

In addition, the Deep C Hai Phong II opened in May 2018 and the Deep C III/ International Gateway Port Industrial Zone is currently in the planning phase.

VSIP Hai Phong Industrial Zone

The 1,600 ha industrial zone, established in 2010, is situated in close proximity to the Hai Phong port as well as the Cat Bi airport. Major industries in the zone include mechanical engineering, electronics, light industry, information technology, and packaging.

Trang Due Industrial Zone

The 400 ha industrial zone, established in 2007, is located on the National Highway 10 and is in close proximity to the Hai Phong port and Cat Bi airport. Major industries in the zone include garments, footwear, agricultural products, agricultural equipment, and electronics.

In the last decade, Hai Phong, has made significant improvements in infrastructure, which has transformed the city and the surrounding region into a major manufacturing and logistics hub. As investments pour in and infrastructure is further developed, Hai Phong has the potential to establish itself as not only a national manufacturing and logistics hub, but also a regional one.

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